Family Business & SME Priorities: What Matters Now

Why This Matters 

This article continues our series highlighting the importance and advocating for Family businesses and small-to-medium enterprises (SMEs). They engine the economy and are the heart of communities, the stewards of generational legacy, and the champions of local resilience. As we enter the final quarter of 2025, understanding the current sentiment and strategic priorities of these businesses is critical, not just for owners and operators, but for their advisers, policymakers, and industry partners.

This article distils insights from the latest surveys published by leading firms and associations including PwC, Deloitte, KPMG, Grant Thornton, BDO, NAB, and the Family Business Association.

Are We Asking the Right Questions? A View from Active Directions 

Active Directions reviewed the research on family businesses and SMEs and we noticed a clear pattern emerge. While the reports offer valuable insights into succession planning, sustainability, and technology adoption, they often appear to emphasise these themes through the structure of their surveys. This can unintentionally steer the narrative toward areas like ESG and AI, which, while important, may not fully reflect the immediate priorities of private and family-owned businesses. 

What’s noticeably absent are direct questions about growth. Where it is coming from, how it is being invested in, and what strategies are driving it. For many family businesses, the focus is not on chasing trends but on remaining viable, sustainable, and growing in the right direction. These businesses are navigating uncertainty with pragmatism, and they need insights that speak to their reality: maintaining cashflow, expanding into new markets, developing new products, and building customer loyalty.  

Our synopsis addresses the research; however, we believe future surveys would benefit from a more balanced approach, one that captures both strategic aspirations and operational realities, and is shaped in consultation with the very businesses they aim to support. 

Global Trends: What the Data Is Telling Us 

Recent surveys reveal a mix of cautious optimism, strategic transformation, and generational transition. Here are the most consistent themes: 

1. Succession Planning Is No Longer Optional: Deloitte’s July 2025 survey of family enterprises found that succession planning is now a top priority, with 68% of respondents actively preparing for leadership transitions. This aligns with KPMG’s global report, which highlights a growing awareness of the need for structured governance and leadership development.
   
   
2. AI and Automation Are Gaining Ground: Mazars’ SMB report shows a sharp uptick in AI adoption, particularly in finance, operations, and customer service. While enthusiasm is high, many businesses are still in the early stages of discovery and implementation.
   
   
3. Financial Resilience Through Cost Optimisation: While not always highlighted as a headline trend, cost optimisation is a recurring theme. Deloitte and NAB surveys show that businesses are actively reviewing expenses, renegotiating supplier terms, and streamlining operations. Scenario planning is increasingly used to prepare for multiple economic outcomes, helping businesses stay agile and financially resilient.
   
   
4. Sustainability Is Becoming Strategic: KPMG and Grant Thornton both report that ESG and sustainability are moving from compliance to competitive advantage. Family businesses are increasingly integrating sustainability into their core strategy, not just for regulatory reasons but to align with values and attract talent.
   
   
5. Governance Is Getting Formalised: From Europe to North America, there is a clear trend toward formal governance structures such as boards, advisory councils, and documented policies. This is especially true for multi-generational businesses seeking to balance tradition with innovation.

Australian Sentiment: A More Cautious Outlook 

While global trends show momentum, Australian SMEs and family businesses are expressing more caution in the face of economic uncertainty. Confidence levels are mixed, with NAB’s Q2 2025 SME survey reporting a decline in business conditions, particularly in retail and construction. However, sentiment remains stable in sectors like professional services and healthcare. Fifth Quadrant’s August SME Tracker indicates a rebound in growth expectations, suggesting that despite macroeconomic challenges, many businesses are still optimistic about the future. 

Cost pressures are front of mind for Australian SMEs, with many revisiting budgets, trimming non-essential spending, and preparing for prolonged uncertainty. Financial planning and scenario modelling are becoming essential tools for navigating this environment. Technology adoption also lags behind global peers, with businesses citing cost, complexity, and capability gaps as barriers to implementing AI and automation. Advisers have a critical role in helping SMEs identify practical, low-risk opportunities to improve efficiency and competitiveness. 

Three Actions for the Next Quarter 

Based on the data, here are three strategic actions family businesses and their advisers should prioritise before year-end: 

1. Formalise Succession and Governance Plans: Even if leadership transition is not imminent, having a documented plan builds confidence and continuity. Advisers should help clients establish governance frameworks that reflect both family values and business needs. 
   
   
2. Pilot AI or Automation in One Area: Start small. Whether it is automating invoicing, using AI for customer insights, or streamlining HR processes, a focused pilot can build momentum and demonstrate value. Advisers should help identify the right tools and vendors. 
   
   
3. Plan for Cost Optimisation Through Scenario Planning: With economic uncertainty likely to persist, businesses should conduct scenario-based budgeting to prepare for multiple outcomes. This includes identifying areas where costs can be optimised without compromising core operations. Advisers can support this by modelling different financial scenarios and helping clients make informed decisions about staffing, investment, and supplier relationships. 

 
Taking the Next Steps

Family businesses and SMEs are navigating a landscape shaped by rapid change, generational shifts, and economic headwinds. The right support; tailored, timely, and grounded in real-world priorities can make all the difference. 

If you're advising a family business or leading one yourself, now is the time to turn insight into action. Whether it's succession planning, cost optimisation, or exploring practical uses of AI, we’re here to help you move forward with confidence. 

Let’s talk. Reach out to schedule a conversation and explore how we can support your goals for the quarter ahead, and beyond.